Strengthening SHG bank linkage in the state of Uttarakhand, India

• Aug 4, 2025
• 1 min

Self-Help Groups (SHGs) in Uttarakhand struggle to access and utilize Cash Credit Loans (CCL), with more than 60% of allocated funds remaining unused due to a lack of awareness and unclear documentation. Also, issues such as poor with bank officials and SHGs, high stamp duty charges, and limited understanding of the NRLM MIS portal hinder loan disbursement to SHGs and the uptake of benefits. To resolve this, MSC provided technical assistance to Uttarakhand State Rural Livelihood Mission (USRLM) in strengthening SHG-bank linkages.

MSC conducted awareness and capacity building camps with SHGs to address knowledge gaps, facilitated coordination with SRLM teams, and worked with banks to simplify processes and resolve documentation-related challenges. Through the collaborative efforts of MSC and USRLM, the SHG Bank Linkage program has achieved notable progress across key focus areas—namely, Cash Credit Limit (CCL) uptake, interest subvention implementation, and NPA management.

Between March 2023 and April 2025, the proportion of SHGs linked to banks increased from 55% to 68%, while loan utilization more than doubled, rising from USD 19 million to USD 39 million. The initiative to improve access to subsidized interest rates has been effective, with the percentage of SHGs charged higher interest rates dropping significantly from 52% in March 2023 to 11% in April 2025. Moreover, the Non-Performing Assets (NPA) rate declined from 4% to below 2%, indicating strengthened financial discipline and improved credit portfolio quality.

The Gates Foundation commissioned the project.